Questions 1-3 (of 3) One Product Corp. (OPC) incorporated at the beginning of la
ID: 2588234 • Letter: Q
Question
Questions 1-3 (of 3) One Product Corp. (OPC) incorporated at the beginning of last year. The trial balance prepared on December 31, at the end of its first year of oper Cash Accounts Receivable Allowance for Doubtful Accounts Inventory Prepaid Rent Equipnient Accumulated Depreciation Accounts Payable Sales Tax Payable FICA Payable Withheld Income Taxes Payable Salaries and Wages Payable Unemployment Tax Payable Unearned Revenue Interest Payable Note Payable (long-term) Common Stock Acdditional Paid-In Capital, Common Retained Earnings Treasury Stock $19,500 8,250 885 12,060 1,600 25,000 2.400 0 500 600 500 1,600 300 4.500 495 22.000 13,300 19.210 4.120 4.000 The following information is relevant to the first month of operations int OPC sell its inventory at $150 per unit. plus sales tax of 6Explanation / Answer
8 Number of stock outstanding on the date of declaration of stock dividend Beginning Common stock (13300/2) 6650 Treasury stock -500 6150 Journal entries for stock dividend: 30% stock dividend Date General journal Debit Credit Retained earnings 3690 common stock 3690 (6150*30%*$2) (Recorded issuance of 30% stock dividend) 9 Journal entries for stock dividend: 10% stock dividend Date General journal Debit Credit Retained earnings 3075 common stock 1230 (6150*10%*$2) Additional paid-in capital-common [6150*10%*(5-2)] 1845 (Recorded issuance of 10% stock dividend) 10 Discount rate=market interest rate=7% Present value of $90000 face value on repayment at the end of 6th year=90000*Present value @7% for 6th year=90000*0.666342=59971 Present value of $90000 annuity=Present value of interest on bond for 6 years=(90000*5%)*present value @7% for 6 years=4500*4.76654=21449 Total value of bond=59971+21449=81420 11 Present value of lumpsum payment made now=$98000 Present value of lumpsum payment made now=Lumpsum payment*Present value @ 7% for the 3rd year 98000=Lumpsum payment*0.816298 Lumpsum payment=98000/0.816298=120054 12 Present value of periodic payments=$98000 Present value of periodic payments=periodic payment*cumulative present value factor @ 7% for 3 years. periodic payment=Present value of periodic payments/cumulative present value factor @ 7% for 3 years. periodic payment=98000/2.624316=$ 37343
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.